PDVSA: Settlement with Eni Possible

Venezuela's state oil firm PDVSA and Italian oil and gas major Eni (NYSE: E) could settle their oilfield dispute rather than rely on arbitration center Icsid to resolve the issue, newspaper El Universal reported.

ENI filed the case with the World Bank's Icsid after refusing to sign a JV with PDVSA for the Dacion field because it disagreed with the terms. PDVSA in turn seized Dacion operations.

ENI refused to trade its contract for a minority stake in a PDVSA-controlled JV.

In a similar situation, PDVSA reached a settlement with France's Total (NYSE: TOT), PDVSA director Bernard Mommer said in a meeting with lawmakers in the national assembly, the paper reported.

"With the first [Total], we reached a friendly agreement on very good terms," Mommer said.

Total was similarly forced off the Jusepin oilfield in eastern Venezuela. Months later it received US$250mn, mostly in crude, from PDVSA with the promise of not pursuing litigation. The UK's BP (NYSE: BP), which held a stake in the Jusepin contract, shared in the award.

Icsid (International Center for Settlement of Investment Disputes) provides facilities for conciliation and arbitration of disputes between member countries and investors, according to its website.